Micro, small and medium enterprises (MSMEs) are called to leverage financial technology (fintech) solutions to expand their business as these allow them access to finance and simplified access to capital.
During the Financing Innovation and Exposition + Interactive Forum for NCR (National Capital Region) MSMEs, Rona Joy Bulaong, director of Nine26 Marketing Consultancy, said fintech enhances, automates and delivers financial services and solutions to businesses and consumers.
“The tools that you already know are already fintech so it is not that intimidating anymore. So it’s really a matter of more education and integration into your business. And from that, how do you scale? Because that’s really our goal –so that your business can thrive,” Bulaong, the Department of Trade and Industry’s Philippine Trade Training Center resource person, said.
Bulaong said fintech allows round-the-clock access to finance last-minute transactions -fund transfer, buying, and receiving payments.
“(Fintech facilitates) faster and easier payments, instant, cashless, and trackable payments,” she said.
Bulaong said fintech also enhances MSMEs’ simplified access to capital.
“(They can) apply for loans online with faster approval, fewer documents, no need to visit banks or offer high value collateral,” she added. “So for example, a laundry business wants to expand, it has just one to two machines, it wants to add (these) or open another branch, it has no credit history yet, so it can apply (loans) from alternative (financing) and online lending institutions.”
Bulaong said fintech transforms business operations as it also contributes to financial inclusion, offers tools for data-driven decision making, better customer retention, and secure and transparent transactions.
“Digital payments are traceable and protected. Apps offer transaction histories, fraud alerts, and secure log-ins,” she said.
Aside from payments and lending, Bulaong cited other types of fintech which the MSMEs’ can access, including remittance, e-wallets, blockchain/cryptocurrency, wealthtech, Know Your Customer (KYC)/Regulatory Technology (RegTech), Buy Now, Pay Later (BNPL), insurance technology, digital banks, digital-centric banks, PropTech (technology used in real estate), Open Finance, crowdfunding, and comparison (tools/apps).
She said KYC refers to rules to verify who you are when signing up for financial services, while RegTech are technology tools that help companies follow legal and security rules easily.
Digital-centric banks are traditional ones that have strong online services, allowing firms to do most transactions through apps or websites, she added.
“(Open Finance is) a system where your financial data (with your permission) can be shared securely between banks and apps to offer better services and loans,” she said. “(Comparison are) platforms that let you compare financial products (loans, insurance, savings, etc.) to find the best deal for your needs.”